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McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Define marketing and identify the diverse factors influencing marketing activities.

Explain how marketing discovers and satisfies consumer needs.

Distinguish between marketing mix factors and environmental forces.LO3

LO2

LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 1, YOU SHOULD BE ABLE TO:

LO1

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Explain how organizations build strong customer relationships and customer value through marketing.

Describe how today’s customer relationship era differs from prior eras.

LO4

LO5

LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 1, YOU SHOULD BE ABLE TO:

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RESEARCHING HOW COLLEGE STUDENTS

STUDY TO LAUNCH A NEW PRODUCT AT 3M

Satisfying StudentNeeds

Discovering Student Needs

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INNOVATION AND MARKETING AT 3M DISCOVERING & SATISFYING STUDENT STUDY NEEDS

+Felt Tip Highlighters

=3M product that

will combine

Post-it® Notes or

Post-it® Flags and

Highlighters

3M Post-it® Notes or

Post-it® Flags

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Marketing is NOT Easy

WHAT IS MARKETING ?LO1

You Are a Marketing Expert Already

• Involved in 1,000s of Buying Decisions

• May Be Involved in Selling Decisions

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1. True 2. True 3. (c) plastic bottles

FIGURE 1-1 The see-if-you’re-really-a-marketing-expert test

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MARKETING MATTERSWhen Your College Instructor Says,

“You Didn’t Do Very Well,” There’s Still Hope!

LO1

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Marketing Seeks to:

Exchange

• Discover Needs and Wants of Customers

• Satisfy Them

WHAT IS MARKETING?DELIVERING BENEFITS

LO1

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What do “soccer moms” need in a car?

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WHAT IS MARKETING?DIVERSE FACTORS INFLUENCE MARKETING ACTIVITIES

LO1

The Organization Itself and Its Departments

Society

Environmental Forces

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FIGURE 1-2 A marketing department relates to many people, organizations, and environmental forces

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WHAT IS MARKETING?REQUIREMENTS FOR MARKETING TO OCCUR

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Two + Parties withUnsatisfied Needs

A Desire and Abilityto be Satisfied

A Way for the Partiesto Communicate

Somethingto Exchange

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HOW MARKETING

DISCOVERS CONSUMER NEEDSTHE CHALLENGE: NEW PRODUCTS

LO2

Consumers May Not Know or Cannot Describe What They Need or Want

Most New Products Fail

• “Focus on the Consumer Benefit”

• “Learn From the Past”

The Challenge:

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• But you have to learn

• No, SRSLY

Dr. Care Vanilla-Mint Aerosol ToothpasteWhat “benefits” and what “showstoppers?”

LO2

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Hot Pockets SnackersWhat “benefits” and what “showstoppers?”

LO2

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Terrafugia TransitionWhat “benefits” and what “showstoppers?”

LO2

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Pepsi MaxWhat “benefits” and what “showstoppers?”

LO2

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Need Want

Does Marketing PersuadePeople to Buy the“Wrong” Things?

Market

HOW MARKETING

DISCOVERS CONSUMER NEEDSNEEDS VS. WANTS

LO2

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FIGURE 1-3 Marketing seeks to discover consumer needs through research and then satisfy them with a marketing program

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HOW MARKETING

SATISFIES CONSUMER NEEDSLO3

• Promotion

• Place

Target Market

The 4 Ps: Controllable Marketing Mix Factors

• Product

• Price $499

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HOW MARKETING

SATISFIES CONSUMER NEEDSLO3

• Technological

• Regulatory

Uncontrollable Environmental Forces

• Social

• Economic

• Competitive

Customer Value Proposition

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THE MARKETING PROGRAMCUSTOMER VALUE AND RELATIONSHIPS

LO4

• Best Price • Best Service

Customer Value

• Best Product

Value Strategies

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Southwest Airlines, Starbucks, and Home Depot

What customer value strategy?LO4

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THE MARKETING PROGRAMRELATIONSHIP MARKETING

LO4

• Easy to Understand

Relationship Marketing

• Hard to Do

Marketing Program

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3M’S STRATEGY & MARKETING PROGRAMHELPING STUDENTS STUDY

LO4

Move from Ideas toa Marketable Highlighter Product

Add the Post-it®

Flag Pen

Develop a Marketing Program for thePost-it® Flag Highlighter and Pen

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FIGURE 1-4 Marketing programs for two new 3M Post-it® brand products targeted at two distinct customer segments: college students and office workers

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3M STRATEGY & MARKETING PROGRAMMARKETPLACE SUCCESS?

LO4

Developed ThirdGeneration Post-it®

Flag Highlighter

Appeared onThe Oprah Winfrey Show

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FIGURE 1-5 Four different orientations in the history of American business

Production Era

Sales Era

Marketing Concept Era

Customer Relationship Era

• Market Orientation

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Think of the worst date you’ve ever had(If it hasn’t yet, don’t worry, IT WILL)

●What did s/he think was happening/happened?

●What did you think was happening/happened?

●What did s/he learn from it?

●What did you learn from it?

Mine was my sophomore year of college…

HOW MARKETING BECAME IMPORTANTEVOLUTION OF THE MARKET ORIENTATION

LO5

Customer RelationshipManagement (CRM)

Customer Experience

• What Firms Think They Offer Customers

• What Customers Say They Receive

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HOW MARKETING BECAME IMPORTANTETHICS AND SOCIAL RESPONSIBILITY

LO5

Ethics

Social Responsibility

• Societal Marketing Concept

• Macromarketing

• Micromarketing

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HOW MARKETING BECAME IMPORTANTBREADTH AND DEPTH OF MARKETING

LO5

Who Markets?

What Is Marketed?

• Products

(Goods)• Services • Ideas

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HOW MARKETING BECAME IMPORTANTBREADTH AND DEPTH OF MARKETING

LO5

Who Benefits?

Who Buys & Uses What Is Marketed?

• Ultimate Consumers

• Organizational Buyers

How Do Consumers Benefit?: Utility

• Form Utility

• Place Utility

• Time Utility

• Possession Utility1-34

Marketing

Marketing is the activity for creating, communicating, delivering, and exchanging offerings that benefit the organization, its stakeholders,and society at large.

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Exchange

Exchange is the trade of thingsof value between buyer and seller so that each is better off after the trade.

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Market

A market consists of people with both the desire and the ability to buy a specific offering.

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Target Market

A target market consists ofone or more specific groups of potential consumers towardwhich an organization directs its marketing program.

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Marketing Mix

The marketing mix consists of the marketing manager’s controllable factors—product, price, promotion, and place—that can be used to solve a marketing problem.

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Customer Value Proposition

Customer value proposition is the cluster of benefits that an organization promises customers to satisfy their needs.

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Environmental Forces

Environmental forces consist of the uncontrollable forces in a marketing decision involving social, economic, technological, competitive, and regulatory forces.

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Customer Value

Customer value is the unique combination of benefits received by targeted buyers that includes quality, convenience, on-time delivery, and both before-saleand after-sale service at aspecific price.

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Relationship Marketing

Relationship marketing linksthe organization to its individual customers, employees, suppliers, and other partners for theirmutual long-term benefits.

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Marketing Program

A marketing program is a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers.

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Marketing Concept

A marketing concept is theidea that an organization should (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization’s goals.

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Market Orientation

A market orientation occurs when an organization focuses its efforts on (1) continuously collecting information about customers’needs, (2) sharing this information across departments, and (3) using it to create customer value.

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Customer Relationship Management (CRM)

Customer relationship management (CRM) is the process of identifying prospective buyers, understanding them intimately, and developing favorable long-term perceptions of the organization and its offerings so that buyers will choose them in the marketplace.

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Customer Experience

Customer experience is the internal response that customers have to all aspects of an organization and its offering.

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Societal Marketing Concept

Societal marketing concept is the view that organizations should satisfy the needs of consumers in a way that provides for society’s well-being.

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Product

A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers’ needs and is received in exchange for money or something else of value.

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Ultimate Consumers

Ultimate consumers consist of the people who use the goodsand services purchased for a household. Also called consumers, buyers, or customers.

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Organizational Buyers

Organizational buyers arethose manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale.

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Utility

Utility consists of the benefits or customer value received by users of the product.

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